The Retail Lifestyle Champions: ITC grows prices, Foods and education in H1

Monday, October 24, 2011

tbd 

ITC - Outperforming expectations

Though much more analysis is required before the compoany settles down in the second YV Deveshwar term and gets back into the new M&A game, The retail lifestyle star with good new brand launch traction since 2009, posted good growth nos. 

Tobacco business has posted steep price increase at retail POP this  quarter  at 10% with more hikes coming after inflation lasted more than a year and input costs are out of whack

Still the price increases that ITC has taken will boost EBIT [earnings before interest, taxes] margins by 80 basis points, they say. Its cigarette volumes are expected to grow 7% in July-September,

Bank of America Merrill Lynch sees ITC’s margins surge 115 bps in the quarter.

Kotak Securities expects ITC’s cigarette division sales will rise 13% from a year ago, helped by a mix of price hikes and volume growth.

While the cigarette business remains robust, its non-cigarette FMCG business is also expected to remain on the growth track. Sharekhan expects the FMCG business losses will reduce 12% year-on-year. The Motilal Oswal analysts expect EBIT losses in FMCG will decline 16%, while sales increase 19%.

"Improved profitability in foods [Bingo breakeven in the first quarter FY12], education and lifestyle retail will drive the decline in EBIT losses," say Aggarwal and Kapoor.

Posted via email from The investment blog on Post

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